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Investor Spotlight: Can Academic Physicians Find Real Estate Success too? YES!

Investor Spotlight: Brian

Summary: The goal of our Investor Spotlight series is to provide you with stories of real doctors and high-income professionals who are at different points in their journey to reaching financial freedom through real estate investing. Today’s spotlight is on Brian. His investment journey began after being influenced by two crucial events in his life. After going through personal hardships – divorce and a career reevaluation, he was catapulted to his biggest breakthrough and began his journey toward reaching financial freedom.

[Disclaimer: We are not accountants, lawyers, or financial advisors, so please consult your own team of professionals about the topics covered in this article.]

This post contains affiliate links, which means that if you choose to make a purchase, we will earn a commission at no additional cost to you. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.

We interviewed Brian during our first annual Fast FIRE to Freedom Summit in August 2021. You can watch the interview here to hear Brian’s real estate journey in his own words!

 

Can you tell us a little bit about yourself? 

Brian: I grew up in L.A., but came to San Diego for residency and decided to stay. Currently, I am an academic hospitalist at the VA San Diego, and a clinical professor in the Division of Hospital Medicine at the University of California. My focus is on medical education for students studying internal medicine. I’m really passionate about my work. I am constantly wearing several hats in my day-to-day life.

 

How did your interest in real estate begin? 

Brian:I grew up in a household with financial principles ingrained in me at a very early age. My parents stressed the importance of finding a stable job, saving money, and then putting that money in a bank account to build interest. Ever since college, I have been investing in the stock market and contributing to a Roth account. Unfortunately, I went through some very difficult personal hardships that really impacted me and changed my outlook on life. I underwent a divorce in 2017; not only was it physically and emotionally taxing, but it was a huge blow to my finances. It seemed almost unfair because I had been following all of these investment principles for years in an effort to build wealth, so it was almost like hitting a reset button. 

California is a community property state, so half of what you own is divided between the two parties in a divorce settlement. I started thinking that maybe I should start doing something else financially. Also working at the VA, I was taking a hit to my salary because it’s academic and very mission-driven. I was feeling a disparity in terms of what I make, versus what people make as hospitalists in the community. I started thinking about where I wanted to be 30 years down the road and my own family. From there, I began listening to podcasts and reading a lot of books, like “Rich Dad, Poor Dad”. That book got me thinking about purchasing assets. 

Real estate intrigued me because I like the thought of investing in something that will increase in value over time, rather than just putting money down and hoping to get a good return. Active real estate appealed to me so much because I could own a property and control what happens to it, as opposed to investing in a giant fund of money that other people control. 

 

 

Where did your investment journey go from there once you had that interest, what did you do next? 

Brian: A few years ago, I was thinking about real estate while listening to a podcast. A physician came on and spoke about turnkey rentals, which I found interesting. I then read the book “The Millionaire Real Estate Investor” by Gary Keller, which just sent me over the top! The return is important, but what if my tenants could pay down my mortgage, and what if I could make cash on top of that? Then I learned about all of the tax benefits as well. There was just so much that I found so alluring. I thought, “Oh man, I have to buy a property.” When I first heard about Zero to Freedom, I told myself “I need something like that to learn how to buy a house.” It was kind of crazy because I had already set a goal of buying a house in six months, so I didn’t hesitate and signed up for the program immediately.

 

 

Tell us about how you took action.

Brian: I always like to process and go through all of the steps before creating an action plan for everything that I do. That’s how I approached my investment journey. I believe there are different types of learners in the course. I thought, “Let me go through the course first, then let me think about specific ways how I can use what I already have.” When choosing a market, I just thought why would I ignore the advantage that is already there and try to find something new? I had already been networking before taking Zero to Freedom, and I had made relationships with people who were investing in Kansas City. Once I was preapproved with an investor-friendly lender, I started reaching out to my network in Kansas City.

[If you want an introduction to an investor-friendly lender, CLICK HERE]

 

 

Any lessons learned? 

I realized that there were a lot of real estate agents that only want you to work with them exclusively. They won’t tell you straight up that they want you to exclusively work with them, but, you’ll be on the phone with them and then all of a sudden they’re like, “Oh, shoot! You’re talking to other people. I don’t want to talk to you anymore.” I encountered a situation with two real estate agents who I was working with at the same time when I took a deal from one of them and the other agent became very upset. In this process, I saw a lot of dynamics as to how people work. I think one of the things about real estate is you learn how to navigate these relationships. At the end of the day, you just want to treat people well, bring value to them, and vice versa. Learning how to manage those relationships was one of the first barriers or obstacles I encountered as I was taking action.

 

 

How did you maintain a good relationship with that agent?

Brian: I think character and integrity are really important characteristics to look for in the people that you choose to work with. This agent has an exclusivity contract, but he didn’t enforce it. He let me know that if I had another deal from someone else, he would be OK if I worked with them, but just asked that I take the time to check out his properties too. Which I think is completely fair. 

 

 

What happened after? It sounded like you bought a couple of properties with that one agent. 

Brian: The first property that I bought was right at the start of COVID. It was a duplex amid a bunch of single-family homes in a county called Johnson County in Kansas City. Johnson County, just to give some history, is a rapidly appreciating county. So everything is going up really, really fast. It was one of those deals where we had to make a strong bid. I ended up bidding about $15,000 over the list price to try to secure the deal. Then I heard back from my agent that they wanted us to waive the appraisal contingency. I think they were worried that the property wasn’t going to appraise for that amount. We ended up waiving the appraisal contingency to a point – we set that point at around $10,000 above the list price. By doing that, it actually allowed me to secure and lock up the deal

 

 

Did you find that deal yourself, or did your agent find it for you?

Brian: I did. I found it myself and then contacted my agent immediately. What I like about my agent is that he’s super responsive and enjoys going out to the property. As soon as I called him, he said, “Hey, I’ll go check it out,” and then he gave me a rundown. He is not only my agent, but also my contractor as well. He has kind of a dual agency role, which I think a lot of times you have to be a little bit careful and skeptical about. One of the things that allowed me to start trusting him more is that he does have high standards. He was out looking at the property for other investors and got back to me saying “the quality of their work is really shoddy.” 

 

 

Did that property require work and did you end up doing rehab on it? 

Brian: Yes, we ended up getting the roof replaced. That was one of the first renovations that we did there. In reality, it needed a lot of little things fixed. We had to basically do a full gut rehab of the kitchen, as well as the bathroom, and also some of the electrical systems. One of the electrical panels was behind where the washer and dryer were going to be. That is obviously not a place where you can have it, so we actually had to repurpose that into a different area. We also had to do a lot of other minor electrical changes. That is something we anticipated, but it did bring the rehab cost up a little bit. It’s much more functional now, and it’s much safer, which I think in the long term is going to be great.

 

 

How did COVID affect you, and were you able to go see the property?

Brian: I have to admit that I was getting a little nervous during this time because we closed the deal on the property at the end of February, right around when things were starting to shut down. Real estate has really changed over the years. Now you can see and know so much, even if you aren’t physically there. When I think about Kansas City, I feel like I know Kansas City. It’s so funny because I haven’t been there, other than to the airport. I still haven’t seen either of my properties in Kansas City because I’ve been extremely cautious about traveling. I’m very excited because I believe that in the coming year, I will finally be able to visit and see these properties and assets that I’ve acquired. Throughout this entire process, the acquisition phase, the renovation phase, and even now that it’s stabilized, I’ve only seen before and after pictures.

 

Before and after images of Brian’s first Kansas City property.

 

 

Can you talk about the level of trust that you have with them?

Brian: I do trust people, but I like to verify things. People tend to say all the right things, but that doesn’t mean they’ll actually do them. Still, I have to trust them and give them a chance to do what they say they will do. Then see if they are open to receiving feedback. This one company reached out to me and was really trying to understand how they could improve my experience. That is something I really value. One of the team members that I’ve replaced a lot is the real estate agent, because a lot of times they may not understand things like depreciation. That for me is a bit of a red flag. I learned that you must also be ready to replace team members if things don’t work out. However, I tend to be on the side of giving people a number of chances before moving on to another person. 

 

 

Can you tell us about your second investment property? 

Brian: With my second property, it’s something that I actually didn’t expect. I was on our team’s page when I saw a property that was in Bonner Springs. I immediately went on to different listing sites to check if I could see it on MLS. Turns out, it was for sale. I called my agent the next day and mobilized my team immediately. I called two of my lenders and I asked what the best starting rate would be so we could get the pre-approval. My agent went on-site and did a walkthrough. It turned out this owner was actually offering multiple duplexes on the same street. So, we put in an offer for two because that way we could actually ask for a discount. I think it’s a really great buy and we’ve done a lot of good work on it, and brought new tenants in.

That was my first experience acquiring an older property, it was from the 1960s. We ended up discovering some things as we went along, including some foundation issues which were hidden by the piles of trash and cat feces that were on the floor. We discovered during our due diligence process that one of the tenants hadn’t been paying. Not just for one month, but for several months. That obviously offered an element of risk because if you inherited a non-paying tenant during COVID, with the moratorium, it would be pretty challenging. So we started thinking about how we were going to help this tenant. We asked the owner to give the tenant notice, and we discussed incentives because even $600 in that area, is a really low rent. We ended up giving cash-for-keys as an incentive. If they moved out earlier, we would be able to give them an amount very close to their rent price. They agreed. As a result, it was a smooth transition and we immediately started rehab.

 

 

Where do you plan on going with your real estate portfolio in the future? Where do you want to be in a year, or five years from now? 

Brian: I think a big part of it is getting my wife on the same page in terms of our goals. She comes from a family who has invested in real estate. I’m hoping that we’ll get to a place where the next year will be a big acquisition year for us, and hopefully I can finally join the other coaches on the REPS [real estate professional status] bandwagon. I think relationships, especially personal ones, trump anything else. Therefore, I want to make sure that we’re on the same page before we go there.

 

[If you’re interested in learning more about REPS, check out our guide HERE]

 

 

 

Any closing advice for others who are maybe hearing about real estate for the first time and are looking for some insights, what advice would you give?

Brian: I think it comes down to the fact that multiple roads lead to freedom. Just because I participate in real estate, doesn’t mean that I don’t have money or assets in other places. I still have a brokerage account. I still have a retirement account. Your road doesn’t have to be exactly like someone else’s. It won’t be like someone else’s. You create your path. You figure out what’s your style, maybe real estate, or maybe it’s a more passive investment, and that’s okay. Money doesn’t buy happiness, but money can certainly help quite a bit in terms of contributing to your goals and your wellness. I think that’s what I try to tout. Even when I’m talking to any of my colleagues or any of my students about money. Thinking about where we are in terms of our worth is very important, as well as our satisfaction with what we do in life. 

 

 

 

Do you want to learn how to creatively fund your real estate portfolio and achieve financial freedom? Join the conversation! Follow our Semi-Retired MD Facebook page and join our Physicians (for MDs or DOs only) or Professionals group! 

Semi-Retired M.D. and its owners, presenters, and employees are not in the business of providing personal, financial, tax, legal or investment advice and specifically disclaims any liability, loss or risk, which is incurred as a consequence, either directly or indirectly, by the use of any of the information contained in this blog. Semi-Retired M.D., its website, this blog and any online tools, if any, do NOT provide ANY legal, accounting, securities, investment, tax or other professional services advice and are not intended to be a substitute for meeting with professional advisors. If legal advice or other expert assistance is required, the services of competent, licensed and certified professionals should be sought. In addition, Semi-Retired M.D. does not endorse ANY specific investments, investment strategies, advisors, or financial service firms.

Do you want to learn how to creatively fund your real estate portfolio and achieve financial freedom? Join the conversation! Follow our Semi-Retired MD  Facebook page and join our Doctors or Professionals  group!

Semi-Retired M.D. and its owners, presenters, and employees are not in the business of providing personal, financial, tax, legal or investment advice and specifically disclaims any liability, loss or risk, which is incurred as a consequence, either directly or indirectly, by the use of any of the information contained in this blog. Semi-Retired M.D., its website, this blog and any online tools, if any, do NOT provide ANY legal, accounting, securities, investment, tax or other professional services advice and are not intended to be a substitute for meeting with professional advisors. If legal advice or other expert assistance is required, the services of competent, licensed and certified professionals should be sought. In addition, Semi-Retired M.D. does not endorse ANY specific investments, investment strategies, advisors, or financial service firms.

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Hi, we’re Kenji and Leti

we provide coaching and mentorship for doctors and high-income earners

Several years ago, we were newlyweds working as full-time hospitalists. On paper, it looked like we had everything: the prestigious careers, the happy marriage, the luxurious rental home, the cars, etc.

But in reality? Despite having worked for several years, we had very little savings. Despite our high income, we had very little freedom in terms of time or money.

One thing was clear: we had to do something.

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